Smokestacks and the Swamp
We examine the causal effect of politicians’ partisan ideologies on the industrial pollution decisions of constituent firms. Using a regression discontinuity design involving close U.S. congressional elections, we show that plants increase pollution and invest less in emissions abatement following close Republican wins. We also find evidence of reallocation: firms shift pollution away from areas newly represented by Democrats. However, costs rise and M/B ratios decline, suggesting that support for politicians’ ideological demands can be privately costly. Pollution-related illnesses spike around plants in areas represented by Republicans, suggesting that firms’ passthrough of politicians’ ideological differences can have real consequences for local communities.
Political ideology, industrial pollution, reallocation, health outcomes